Austin, TX · Member since 2015 · 14 posts · 0 votes
Hello my BP friends,
I was on the hunt for duplex for a while an haven't submit any offers yet. Every time when I run numbers it doesn't make sense to pursued.
Asking price $240k
I did my number base on $200k an still shows negative equity . My dilemma is it worth to make an offer that make sense to me even if its way bellow asking price or just move on to next one?
Austin, TX · Member since 2015 · 40 posts · 33 votes
10y
Sergey, I'm doing what your doing in Austin but I may be couple of years ahead of you. My wife and I are currently living in our second Austin duplex and are looking to move into a third (we lived in each for over a year to satisfy the occupancy requirement). In fact, I'm considering the same property as you. I suppose that means you should take my advice with a grain of salt, but I'm sure that property will sell for more than 200k. If you find a duplex in a half decent neighborhood in Austin that works based on those rules (2%, 50%) then run away. It must be too good to be true.
Get good tenants at slightly below market rate, treat them with respect, handle the repairs yourself, don't buy in really bad areas, and your expenses will be much less than 50% on average.
Project/Construction Manager · Costa Mesa, CA · Member since 2015 · 11 posts · 1 vote
10y
Something looks off. You have 200k as the purchase price and 197k as the loan amount? Is one of these incorrect or are you actually only putting 1.5%down?
Rental Property Investor · Austin, TX · Member since 2016 · 6 posts · 1 vote
10y
Insurance looks high. I'd use 5%. You have capex, repairs, and misc totaling 17% That's really high to me. I combine that all into a single category at 10% (which is almost exactly what my properties have cost over the last 8 years).
Changing those two numbers brings your monthly cash flow up to positive $144/month, a huge 22% cash on cash. A great deal assuming a $200k purchase price, but you won't get that property at $200k.
Using a $240k purchase price at 1% down (I assume this is a VA loan?), you can still get a small positive cash flow if you can get $2200 in rent ($1100 from each side). Even though the cash flow is low, your cash on cash is great because of the low down payment.
Personally, I think it's a great property. That part of Austin is getting better and better every day. I would put an offer in.
Austin, TX · Member since 2015 · 40 posts · 33 votes
10y
Sergey, I'm doing what your doing in Austin but I may be couple of years ahead of you. My wife and I are currently living in our second Austin duplex and are looking to move into a third (we lived in each for over a year to satisfy the occupancy requirement). In fact, I'm considering the same property as you. I suppose that means you should take my advice with a grain of salt, but I'm sure that property will sell for more than 200k. If you find a duplex in a half decent neighborhood in Austin that works based on those rules (2%, 50%) then run away. It must be too good to be true.
Get good tenants at slightly below market rate, treat them with respect, handle the repairs yourself, don't buy in really bad areas, and your expenses will be much less than 50% on average.
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
10y
My 2 cents :
The seller is looking to get a premium in excess over the cash flow value due to the high value of the land in that area Those particular duplexes were built all over town in the early 80s by I believe NPC
My guess is the agent probably has investors on his buyers list lined up by the lack of marketing i.e. Only 1 picture. My guess is that it will sell for asking or over ask
Real Estate Broker · Houston, TX · Member since 2015 · 6 posts · 3 votes
10y
$240k is priced to perfection. The MFR in that area is currently at 115 GRM. But duplexes can get away with 120, so I can see the $240k. 2-bed/1-bath units immediately south (Croslin/Twin Crest/Duval/Carmen) are getting in upwards of $1250/mo in rents. Croslin Court (300 Croslin) 2-bed/1.5-bath units are pulling $1375/mo. Last I checked (Q4 2015), Austin Investors Interest had $/SF rent rate at $1.29 for this area.
I sold 3 of those 4plexes, off-market, 2 on MLS (Duval, Croslin), have one on Twin Crest that is pending off-market, and will list another on Carmen this week for $485k. We're pulling $510k+ on rent rolls of $4400-4500/mo.